Bitcoin or altcoins? Who will win the holiday season with Santa rally

Bitcoin fell 12% from its all-time high of $108,353, erasing gains from the second week of December. As Christmas approaches, crypto traders are wondering whether the market will see a “Santa Claus” rally this year.

According to a CoinGecko report, eight out of ten times between 2014 and 2023, crypto markets rebounded during the Christmas holidays. Bitcoin’s recent price decline has dashed hopes of a Santa Claus rally this year, and declining institutional investment inflows have further weakened sentiment.

Will crypto markets see a Santa Claus rally in 2024?

According to the CoinGecko report, the “Santa Claus” rally refers to price increases in crypto in the last five trading days of the year and the first two trading days of the following year. Therefore, the performance of the crypto market is key over the one-week time frame between December 27, 2024 and January 2, 2025.

Bitcoin’s decline from all-time highs has raised concerns among BTC investors and hopes for a Santa Claus rally have clouded this cycle. Between 2014 and 2023, crypto markets experienced a post-Christmas recovery.

Crypto markets have experienced a downturn rather than a rise three times out of ten in the last decade, with a 12.12% pre-Christmas correction during the ICO bubble in 2017.

2014 – 2023 Crypto Santa rally analysis | Source: CoinGecko

With BTC hovering around $97,000 on Tuesday, December 24, a pre-Christmas rally seems unlikely. BTC could gain after Christmas if there is a resurgence in institutional interest in the largest cryptocurrency.

The total market value of cryptocurrencies, excluding Bitcoin, started to recover this week. The daily chart shows bullish signs that support the thesis of an increase in altcoins’ market cap, making it likely that altcoins will observe a rally after Christmas or within the first two trading days of 2025.

Total market cap of crypto excluding Bitcoin | Source: crypto.news Bitcoin 2024 Q4 price performance

Quarterly Bitcoin return data from Coinglass shows over 50% upside in both 2024 and 2023 as of December 24. It is important to note that the bull run in 2020, 2017 and 2013 ended at around 480%, 215% and 168%. % gain in BTC in Q4.

Bitcoin’s performance this quarter has been weak, and there is little evidence to support long-term gains in the first two trading days of 2025. Institutional interest in BTC is slowing, capital inflows are decreasing, and this is evident from the net outflows of Bitcoin Spot ETFs.

Since Bitcoin’s Q4 performance averaged below 54.80%, it is less likely that the token will retest its all-time high before the end of the year.

Bitcoin quarterly returns | Source: Coinglass Top 50 altcoin performance

The altcoin season index on Blockchaincenter.net helps evaluate the performance of the top 50 altcoins over a 90-day period.

The index shows 49 on a scale of 0 to 100; This means that the price performance of the top 50 altcoins has lagged compared to the returns Bitcoin has provided to its holders over the same period.

While 49 means it’s not altcoin season yet, it shows that almost 50% of altcoins have outperformed Bitcoin over the past 90 days.

Top 50 performances for 90 days | Source: Blockchaincenter Trump effect, South Korea and Asia effect this cycle

Bitcoin prices continue to fall despite US President-elect Donald Trump appointing a third pro-cryptocurrency candidate. Trump nominated Stephen Miran to head the Council of Economic Advisers. Miran is a known crypto advocate and another pro-crypto appointment by the new President.

Previously, Trump appointed pro-crypto candidate Paul Atkins to head the Securities and Exchange Commission and tech investor David Sacks as artificial intelligence and crypto czar. While these appointments are expected to lead cryptocurrencies towards positive regulations in the US, the Bitcoin price continues to decline.

Data from Statista shows that South Korea is estimated to be the third largest cryptocurrency market in the world, with exchanges in Korea accounting for more than 9% of global trading volume as of 2021. Korean Won is among the top 5 most traded currencies against Bitcoin. according to data.

South Korea postponed crypto taxation until 2027 and adopted a pro-crypto approach, paving the way for positive developments for Bitcoin traders in Asia and Korea.

Led by Michael Saylor, MicroStrategy’s plan to keep Bitcoin on its balance sheet has inspired a wave of adoption across Asia. According to an Asia Express report, Chinese selfie app developer Meitu invested 31,000 ETH and 940 BTC in spring 2021. Japanese firm Metaplanet has been accumulating BTC throughout the declines and currently holds 1,142 BTC as of December 19.

Asia is at the center of this cycle in BTC adoption and institutionalization, as major companies add Bitcoin to their balance sheets.

Important levels to watch during the holiday

Bitcoin derivatives investors are optimistic about BTC’s gains on exchanges such as Binance, OKX, and Deribit. The long/short ratio exceeds 1 on exchange platforms and BTC observes an increase in open interest, signaling higher relevance and demand among investors.

As bullish sentiment prevailed, over $38 million worth of Bitcoin short positions were liquidated in the last 24 hours.

Basic levels to follow during the holidays:

Support at $89,376 and $92,500: A daily candlestick below the $89,376 level could trigger a breakout of key supports and signal that sellers are ready to push BTC towards $81,500, the lower bound of the imbalance zone on the weekly price chart. This could lead to cascading liquidations and sharp sell-offs in crypto. Resistance at the $100,000 milestone: A daily candle close above this level would reintroduce the new all-time high above $108,000 as a target. BTC could extend its gains and retest the all-time high, marking the top of the cycle. BTC/USDT weekly price chart | Source: Crypto.news

Regardless of current sentiment among investors, Bitcoin remains highly volatile and key levels provide guidance for investors to navigate holiday-induced volatility in the crypto market.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.